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Laxman Pai, Opalesque Asia:

Sovereign wealth funds (SWFs) are increasingly investing in the green energy transition as renewable energy tops climate investment priorities, said a report.

The report by PwC, published in collaboration with the International Forum for Sovereign Wealth Funds (IFSWF) and One Planet Sovereign Wealth Fund Network (OPSWF), looked at how long-term investors - especially SWFs and large public pension funds (PPFs) - are approaching the green energy transition.

It found SWFs are giving more attention to climate-related risks and opportunities, with an overall $2bn increase in investments into renewable energies from 2022 to 2023. While investments in EVs and batteries increased to $2.8bn from 2022.

The report shows that SWFs increasingly pay attention to climate-related risks and opportunities within their portfolios. Some 34.5 percent have assessed the carbon footprint of their whole investment portfolio, while 41.4 percent are doing so.

Estimates by the International Energy Agency (IEA) suggest that the US$2 trillion in clean energy investment expected in 2024 represents less than half the roughly US$4.6 trillion needed annually by the early 2030s to achieve net-zero emissions by 2050.

Together, SWFs and PPFs command significant financial resources: some US$32.8 trillion of assets under management, as of the end of 2023. If aligned with the priorities of the energy transition, their resources could go a long way toward bridging......................

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